Two of China's top four banks have reached a major agreement that will see them cooperate in a range of services.

The China Development Bank and the China Construction Bank announced their agreement in a news release on Tuesday.

Two of China's "Big Four" banks, the CCB and the CDB said they will share services and cooperate in a number of areas, including syndicated loans, asset management, funds settlement, asset securities, joint bank cards, service for small and medium-sized enterprises and property financing.

The two pledge to "actively seek out mutually-beneficial cooperation and use of each other's advantages."

CDB, in tandem with two other policy banks that provide government- ordered financing for agriculture and foreign trade, was set up in 1994, devoting itself to loan support for the nation's infrastructure and high-tech industries.

CDB's financing projects are usually larger and more comprehensive than those covered by commercial banks. The bank has been intending to gain a foothold in the commercial banking business in recent years, expanding its role as an instrument of State policies.

Chen Yuan, governor of the bank, was quoted by a Chinese newspaper as saying last week that "we are now more than just a policy bank," but adding the bank will "continue infrastructure lending and address challenges such as infrastructure and the environment."

CDB reported a net profit of 22.8 billion yuan (2.8 billion U.S. dollars) in 2005, a record high, and an increase of 31 per cent from a year earlier.

The bank's total assets reached 1.9 trillion yuan and total lending grew to 1.7 trillion yuan by the end of last year, when the non-performing loan ratio stood at a mere 0.87 percent, earlier figures show.

CCB said it took the lead among commercial banks to team up with CDB in 1994 and has since maintained sound relations with it in the sectors of bonds investment, bonds borrowing, bonds buy-back and agent business on loans and funds settlement.

Source: Xinhua